Ontario Court Of Appeal Summaries (July 15 – 19, 2019)

Good afternoon,

Following are the summaries for this week's civil decisions of the Court of Appeal for Ontario.

In Stegenga v Economical Mutual Insurance Company, 2019 ONCA 615, the Court had to interpret s. 280 of the Insurance Act. This section relates to the administration of Statutory Accident Benefits under the License Appeal Tribunal. The appellant was seriously injured in a MVA and felt the insurance company acted in bad faith while administering the policy and so the appellant filed a statement of claim to commence a lawsuit. The motion judge struck the statement of claim finding that the dispute fell under the jurisdiction of the Licence Appeal Tribunal and so was statute barred in the Ontario courts. On appeal, the Court interpreted the Act similarly to the motion judge and dismissed the appeal.

In Manastersky v. Royal Bank of Canada, 2019 ONCA 609, the Court found that the trial judge erred in finding that the terminated employee was entitled to damages in respect of the "lost opportunity" to earn additional entitlements under the profit-sharing plan during the period of reasonable notice. The Court emphasized that the parties were in agreement that the terminated employee had already been fully paid for all entitlements owed under the existing plan. Further, the terms of the plan did not place the employer under any obligation to set up a new plan once the existing plan was phased out, or to grant the terminated employee any entitlement rights under such a prospective plan. As such, the Court allowed the appeal and reversed the trial judge's award of damages for this "lost opportunity."

In Alalouf v. Sumar, 2019 ONCA 611, the Court affirmed the principle that in family litigation, a highly deferential standard of review is owed to the factual findings of the trial judge. In applying this principle, the Court agreed with the trial judge that her findings of credibility impacted how she resolved most of the issues.

In Monk v. Farmers' Mutual Insurance Company (Lindsay), 2019 ONCA 616, the major issue considered was the law pertaining to forfeiture and relief from forfeiture in the context of an insurance policy. The Court noted that the power to grant relief from forfeiture is a discretionary one. An appellate court is not at liberty to substitute its own discretion for that already exercised by the judge of first instance. The Court reminded us that the test to apply in assessing relief from forfeiture is the three-element test articulated in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490 and Liscumb v. Provenzano (1985), 51 O.R. (2d) 129, affirmed (1986), 55 O.R. (2d) 404n (C.A.), colloquially referred to as the Saskatchewan River/Liscumb test. The Court noted that where relief from forfeiture is available, an insured must show: (1) that his or her conduct was reasonable; (2) that the breach was not grave; and (3) that there is a disparity between the value of the property forfeited and the damage caused by the breach. In this case, the Court found that the appellant unreasonably delayed reporting the loss to the insurer, attempted to mislead the insurer, and that her breach disproportionately burdened the insurer in considering the necessary steps to take. As such, the Court held that the appellant was not entitled to relief from forfeiture. The Court also considered a number of other issues in this case, including appellate deference to credibility findings made at trial.

Other topics covered this week included a custody and access dispute, an Order regarding a commercial lease, and wrongful dismissal.

Have a nice weekend.

Table of Contents

CIVIL DECISIONS

2214416 Ontario Inc. v. Peel Standard Condominium Corporation No. 937 (Brisdale Plaza Inc.), 2019 ONCA 610

[Feldman, Hourigan and Brown JJ.A.]

Counsel:

C. A. Dirks and R. Fielding, for the appellant, Peel Standard Condominium Corporation No. 937, also known as Brisdale Plaza Inc.

B. V. Hanuka, for the appellant, Royal Pann

H. S. Makkar, for the respondent

Keywords: Real Property, Commercial Lease, Exclusive Business Use, Evidence, Damages, Order, Condominium Act, 1998, S.O. 1998, c. 19, s.135, Courts of Justice Act, R.S.O. 1990, c. C.34, ss. 134(1)(a) and (c)

Facts:

Pursuant to s.135 of the Condominium Act, 1998 (the "Act"), the application judge granted the relief in paras. 4 and 5 of his order dated December 7, 2018 (the "Order") on the basis that at the time of the February 2018 hearing the respondent had a pending sale of its two units and the proposed purchaser of the units intended to operate a restaurant. The appellant, Royal Paan, sought leave to adduce fresh evidence, which disclosed that the sale of the respondent's two units did not proceed and later in 2018, the respondent leased the two units to other companies under separate leases that now run for 5 year terms. This new evidence changed the Order of the application judge.

Issues:

Should the fresh evidence be admitted? Should the Order of the application judge be set aside? Holding:

Appeal allowed in part.

Reasoning:

(1) Yes. Given the reliability of the fresh evidence, its cogency to the operation of the discretionary relief granted by the application judge in his Order, and the unavailability of that evidence at the time of the hearing, the Court granted leave to admit that fresh evidence.

(2) The Court set aside paragraphs 4, 5, 6, 7 and 8 of the Order. In light of the fresh evidence, the Court held that there was no realistic prospect that the respondent would be able to use its two units for a restaurant within the period of Exclusive Business Use stipulated in the Declaration. As a result, the equitable relief granted to the respondent by paras. 4 and 5 of the Order provided no practical benefit to it. The Court held that had the application judge had the facts that were disclosed by the fresh evidence, the relief in paras. 4 and 5 would not have been granted. Therefore, the Court set aside paras. 4 and 5 of the Order.

The Court set aside para. 6 of the Order because Peel Standard Condominium Corporation No.937's ("PSCC 937") failure to produce a record of Exclusive Business Uses did not lead to any damages resulting from the failed sale of the units. No basis remained for a damage claim by the respondent against PSCC 937.

Para. 7 of the Order reserved the determination of the costs below to the judge hearing the assessment. Since the Court set aside para. 6 directing the assessment, it fell to the court of appeal to determine both the costs below and the costs of appeal. In light of all the circumstances and the outcome, the Court conclude that this was an appropriate case where there should be no order as to costs and each party should absorb its costs incurred below and on appeal.

Manastersky v. Royal Bank of Canada, 2019 ONCA 609

[Feldman, Brown and Miller JJ.A.]

Counsel:

J. Devereux and G. Mens, for the appellant

N. Shapiro, for the respondent

Keywords: Contract Law, Employment Law, Termination Without Cause, Constructive Dismissal, Breach Of Contract, Damages, Common Law Right To Damages, Reasonable Notice, Incentive Plan Compensation, Profit-Sharing Plans, Carried Interest Plans, Taggart v. Canada Life Assurance Co., [2006] O.J. No. 310 (C.A.), Lin v. Ontario Teachers' Pension Plan Board, 2016 ONCA 619, Paquette v. TeraGo Networks Inc., 2016 ONCA 618

Facts:

The respondent was employed by the appellant. At trial, the appellant conceded it had terminated the employment of the respondent without cause. The trial judge found that the respondent was entitled to 18 months' notice upon termination.

During his employment, the respondent participated in profit-sharing plans called "carried interest plans". In the last decade of his employment before his termination, the respondent participated in the Mezzanine Carried Interest Plan (the "Mezzanine CIP").

All full-time employees of the appellant were eligible to participate in the Mezzanine CIP, however no employee was entitled as of right to participate. The decision as to which employees would participate lay in the hands of a management committee. When a person became entitled to participate, the committee would issue the participant an allocation letter that established the participant's "points" in the Mezzanine CIP. These points represented the participant's share of the portion of the aggregate profits and losses with respect to that portfolio.

The respondent was allocated points for two separate portfolios ("Fund 1" and "Fund 2"). There is no dispute that at the time of his termination, the respondent's points were fully vested. As such, when the employment of a participant was terminated without cause, the Mezzanine Plan provided that the participant continued as a participant, retaining "in all Portfolios with respect to which he or she has Points, all rights represented by his or her Vested Points."

In mid-2013, the respondent was advised that the appellant was reconsidering its continued reinvestment in the Mezzanine Fund. On February 12, 2014, the appellant informed the respondent that his employment would end effective February 14, 2014. The appellant's decision regarding the Mezzanine Fund appears to have been independent of its decision to terminate the respondent's employment. The termination letter offered to pay the respondent his base salary, bonus payments and benefit entitlements for a period of 13 months.

The respondent did not accept the termination offer, and litigation ensued. In June 2014, the appellant sought to terminate the Mezzanine CIP and ensure no new investments were made as contemplated by the Plan. Over the course of 2015 and 2016, as the portfolios within the Mezzanine Fund were wound-down, the appellant paid the respondent a total of $5,434,309, representing the calculation of his entitlement under the Mezzanine CIP. There is no dispute that the appellant paid the respondent the full amount he was entitled to in respect of his...